Something is clearly the matter with Kansas, so it may be it's not the wisest idea to go overboard extrapolating from the state's behavior to potential developments on the national scene. On the other hand, if you're wondering what complete Republican control of the U.S. government at the federal level would look like, Kansas does offer some clues.

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The dominant approach to tax reform is considered to be “centrist” and symbolized by, among others, the Simpson-Bowles plan.

In what is advertised as a grand bargain between the right and the left, tax rates will be lowered, to appease conservatives, in return for closing many tax expenditures or “loopholes” (for some reason this is presented as a concession to liberals). Revenue that would otherwise be sheltered from taxation by the abolished loopholes would, to some degree, raise overall federal revenue collection, even with lower rates.

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In a story headlined, “For Big Companies, Life Is Good,” the Wall Street Journal reports that big American companies have emerged from the deepest recession since World War II more profitable than ever: flush with cash, less burdened by debt, and with a greater share of the country’s income. But, the paper notes, “Many of the 1.1 million jobs the big companies added since 2007 were outside the U.S. So, too, was much of the $1.2 trillion added to corporate treasuries.”

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Inspired by financier Warren Buffett's revelation that his secretary paid a higher percentage of her income taxes than he did, the Buffett rule is a change in the tax code designed to ensure that the wealthiest Americans do not pay a lower share of their income in taxes than members of the middle class. According to a report released by the White House on Tuesday, 22,000 American households made more than $1 million in 2009 but paid a tax rate of less than 15 percent.

2) How is that possible?

Income generated from capital gains and dividends is taxed at a lower rate than wages and salary. The wealthiest Americans earn considerable income from their return on such investments.

3) How would the Buffett rule work?

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Thanks to a quirk of history, the East River bridges to Manhattan aren't tolled, nor are the outbound Hudson tunnels -- you can drive from Long Island to New Jersey for free if you go through Manhattan. Go around Manhattan, however, and you'll hit tolls of up to $13. The system gives drivers a financial incentive to drive straight through the most crowded, most congested patch of land in the country.

With gas taxes, we make the same mistake: We artificially depress the price of fuel so that the least efficient way to get somewhere -- in this case, a private car -- is also sometimes the cheapest.

New Jersey Gov. Chris Christie has given us an opportunity to discuss this absurdity. On Tuesday, the New York Times revealed the true reason he killed plans for a new rail tunnel from New York to New Jersey. Yes, he was genuflecting before Tea Party deficit hawks, but, said the paper, the decision was actually "more about avoiding the need to raise the state’s gasoline tax."

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And why not? The proposal makes for great politics. Polls routinely show that Americans support higher taxes on the rich. There is no shortage of data showing that over the past few decades the rich have gained a larger and large share of all new wealth created, while paying a lower and lower percentage of their income in taxes. Even better, the proposal draws the sharpest possible contrast with Obama's presumed opponent -- Mitt Romney, who not only is rich as Midas, and paid only 14 percent of his income as taxes in his most recently released returns, but who also believes that the rich should pay even less than they do now.

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Senate Democrats have scheduled a vote Monday on a minimum 30 percent overall federal tax rate for everyone earning more than $1 million a year. It’s nicknamed the “Buffett Rule” in honor of billionaire Warren Buffett who has publicly complained that he pays a lower tax rate than his secretary.

No one in Washington believes the Buffett Rule has any hope of passage this year. It’s largely symbolic. The vote will mark a sharp contrast with Republican Paul Ryan’s plan (enthusiastically endorsed by Mitt Romney) to cut the tax rate on the super rich from 35 percent to 25 percent – rewarding millionaires with a tax cut of at least $150,000 a year. The vote will also serve to highlight that Romney himself paid less than 14 percent on a 2010 income of $21.7 million because so much of his income was in capital gains, taxed at 15 percent.

Hopefully in the weeks and months ahead the White House and the Democrats will emphasize three key realities:

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Ryan is right about sharpening the contrast. But the plan doesn’t do much to reduce the debt. Even by its own estimate the deficit would drop to $166 billion in 2018 and then begin growing again.

The real contrast is over what the plan does for the rich and what it does to everyone else. It reduces the top individual and corporate tax rates to 25 percent. This would give the wealthiest Americans an average tax cut of at least $150,000 a year.

The money would come out of programs for the elderly, lower-middle families and the poor.

Seniors would get subsidies to buy private health insurance or Medicare – but the subsidies would be capped. So as medical costs increased, seniors would fall further and further behind.

Other cuts would come out of food stamps, Pell grants to offset the college tuition of kids from poor families, and scores of other programs that now help middle-income families and the poor.

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Alas, people have short attention spans and a weak understanding of abstract economic issues. You have to tell them a story. The failure of policymakers to do that has been driving progressive MVP Paul Krugman crazy. How can it be, he asks, that governments foreign and domestic are repeating the mistakes of the early 1930s — slashing government spending to reduce budget deficits, putting more people out of work, reducing demand, and inadvertently increasing  deficits? Rinse and repeat.

Part of it is that the lessons of the Great Depression belong to history, and, as such, are infinitely malleable. Arguments your grandfather would have dismissed — such as Mitt Romney’s plans to assure prosperity by topping off Scrooge McDuck’s bullion tank — are given credence today. Granddad may not have grasped Keynesian economic theory, but he remembered “Hoovervilles” and bread lines. Scrooge McDuck wasn’t a cartoon figure for nothing.

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In its views on taxation, the American right is the most divorced from reality. As the fantasy economic plans of the various Republican presidential candidates prove, the right is still stuck in the Reagan era, calling for more and more tax cuts, with undefined spending cuts to be made at some future date, and with deficits and debt tolerated in the meantime — at least if Republicans control the political branches of the federal government.

The right’s derangement on the subject of taxation is often blamed on the anti-tax activist Grover Norquist, or tax-revolt populists like California’s Howard Jarvis in the 1970s. But it has deeper philosophical roots in the libertarian movement, which dominates the right’s economic policy, though not its foreign policy or social policy.

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The move is supposed to be “revenue neutral” – meaning the administration is also proposing to close assorted corporate tax loopholes to offset the lost revenues. One such loophole allows corporations to park their earnings overseas where taxes are lower.

Why isn’t the White House just proposing to close the loopholes without reducing overall corporate tax rates? That would generate more tax revenue that could be used for, say, public schools.

It’s not as if corporations are hurting. Quite the contrary. American companies are booking higher profits than ever. They’re sitting on $2 trillion of cash they don’t know what to do with.

And it’s not as if corporate taxes are high. In fact, corporate tax receipts as a share of profits is now at its lowest level in at least 40 years. According to the Congressional Budget Office, corporate federal taxes paid last year dropped to 12.1 percent of profits earned from activities within the United States. That’s a gigantic drop from the 25.6 percent, on average, that corporations paid from 1987 to 2008.

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Technically, the answer is fairly straightforward. The vast majority of Romney's income isn't actually "earned," in the sense that wages or a salary is earned. His income is mostly derived by profit realized on the sale of investments. Such investments fall under the "capital gains" income tax category. The capital gains tax rate currently sits at 15 percent. (Any dividend income on his investments is also taxed at a 15 percent rate.)

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ABC said it reviewed documents showing  that Romney deposited  millions of dollars of his personal wealth “in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven.” Let’s be clear: this is perfectly legal. It’s also, for a businessman, perfectly ethical. The tax laws allow it, as long as it isn’t used to evade taxes—as Romney’s people insist. But it also stinks, as Romney is utilizing the same kind of offshore havens that organized crime and white-collar criminals use to avoid detection. In other words, it’s very much like pretty everything else Romney did at Bain Capital: it looks dreadful to the people who lines up at the polls on Election Day.

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But on one topic they are as alike as genetically modified peas in a pod. In an era in which Americans are paying historically low taxes and the government faces huge budget deficits, they are all fervently determined to give the richest Americans another huge tax break.

The Citizens for Tax Justice have crunched the numbers, and they are remarkable.

The cost of the tax plans proposed by Republican presidential candidates would range from $6.6 trillion to $18 trillion over a decade. The share of tax cuts going to the richest one percent of Americans under these plans would range from over a third to almost half. The average tax cuts received by the richest one percent would be up to 270 times as large as the average tax cut received by middle-income Americans.

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Bottom line: The average statutory corporate tax rate is 6.2 percent. But between 2008 and 2010, the 265 companies analyzed in the report "paid state income taxes equal to only 3.1 percent." If they had paid the full rate, states would have collected another $82.6 billion in revenues, money sorely needed to pay Medicaid bills and keep parks open and employ teachers and firefighters.

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For example, rank-and-file House Republicans are willing to increase taxes on the middle class starting in a few weeks in order to avoid a tax increase the very rich.

Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.

Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal. The surtax would be 3.25 percent.

This means someone who earns $1,000,001 would pay 3 and a quarter cents extra next year.

Relatively few Americans earn more than a million dollars, to begin with. An exquisitely tiny number earn so much that a 3.25 percent surtax on their earnings in excess of a million would amount to much. Most of these people are on Wall Street. It’s hard to find a small business “job creator” among them.

Nonetheless, Republicans say no to the surtax.

This puts Republicans in the awkward position of allowing taxes to increase on most Americans in order to avoid a small, temporary tax only on earnings in excess of a million dollars — mostly hitting a tiny group of financiers.

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That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.

The basic bargain is over – not only at Ford but all over the American economy.

New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.

Meanwhile, corporate profits now constitute the largest share of the economy since 1929.

1929, by the way, was the year of the Great Crash that ushered in the Great Depression.

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That’s the wrong question. Agreement or not, Washington is on the road to making budget cuts that will slow the economy, increase unemployment and impose additional hardship on millions of Americans.

The real question is how to stop this austerity train wreck, and substitute the following:

FIRST: No cuts before jobs are back – until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers – whose spending is 70 percent of the economy – don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.

SECOND: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The President’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program – rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.

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